Crash Concepts

One of my chief concerns is that our leaders in DC do not really understand the nature of this crisis and are therefore going to either perform ineffective actions or, worse, harmful ones.

I have been silently crossing my fingers beneath the table hoping that Obama’s team would figure out that this crisis is unique and will require some non-status quo solutions.

Although I titled this "Analyzing the Obama Plan" this is neither a partisan nor political posting and not even as much a critique of Obama himself as it is an examination of how the DC machinery currently operates.  No one person controls much more than a sliver of the overall process and results that emanate from DC.

Now that there’s finally some meat on the plan which we can react to, let’s parse the numbers.

Well, as always, I let my need for quality get in the way of punctuality, but the podcast recorded on Friday is now ready for subscribers.

Ron had to make significant upgrades to the site to enable the podcast to be played right from the page (plus other serious fixes regarding file management, but that's already too much information).

The podcasts will be easier and smoother to produce from here on out and I am very much looking forward to enhancing and perfecting this additional means of communicating with the supporters of this site.

You can access podcast via the drop down menu at the top of the page under "Stay Current".

Or you can follow this link.

There are still a few spots available at Rowe.  We know, it's neither in a particularly warm nor accessible place  (especially in Feb!), but it's a unique place and we had a very powerful experience there last year.  This year will be even better.

Many of you have been looking for some more information regarding the content of the Rowe Seminar (Feb 6-8, Rowe MA). Quite a few of you have wondered whether there will be anything you don’t already know from having already watched the Crash Course.

This post will hopefully answer your questions.

Eleven months ago, in February 2008, I led a conference at Rowe (MA) along with Becca Martenson and Alejandro Levins. At that time, the current financial crisis was not even on the radar screen for most journalists and investment houses.

We made these financial recommendations:

• Reduce exposure to equities
• 10-50% of “Nest Egg” in Gold
• Watch the markets carefully! Know what to look for.
• 3 months’ expenses “out of the bank” and in cash (and remaining money in SAFER banks)

We received a kind offer from a woman (who wishes to remain anonymous) to donate a 3-month subscription to someone in need.

We’ve had a number of requests for assistance that we’ve collected over the past few months, we put all these names into a hat and had our daughter Grace (age 8) select a name at random.

The lucky winner was Sharon Sotis who wrote in saying:

I have watched the crash course and come to your site just about daily to keep up to date on the economy and read the forums. I have started to prepare myself and my 6 year old daughter to be more self sufficient, cutting back on expenses etc. I have been telling others to watch and trying to enlighten as many as I can. At times I feel like Noah before the flood. :)

I would love to become a subscriber to your site, but as a widow living on social security, who stays home so I can homeschool my daughter, the cost is prohibitive to me. I know you need to charge to help offset the cost of the site, but wonder if you ever offer subscription free of charge to those who are willing, but just not able to pay?

Happy New Year Sharon and congratulations!

And Happy New Year to everone else!

Best,
Chris

A Summary

Many people have asked us, "Where are the large-scale solutions to all these problems you have described?" and  "What should we do as a nation to avoid the seemingly inevitable consequences of this fiat money system?"

The lack of promotion of a large-scale solution set reflects a deliberate act of strategy rather than negligence. We believe we must reach a critical mass of individuals who have an understanding of the ideas presented in the Crash Course, before any national or global solutions will even be possible.

Because we are still quite far from this tipping point of understanding, this website continues to focus primarily on educating people and helping them move from denial, to awareness, to understanding, and then towards actions rooted in a sense of personal responsibility.

Once we have achieved a critical mass of people who understand the issues and have taken responsible actions as a result, solutions will find more fertile ground in which to take root.  Many people have already reached this place of understanding and assumed personal responsibility for their futures, but this site is organized around the principle that most have not.

Here's a very interesting observation put out by the great writer and very observant economic and social commentator Charles Hughes Smith.

Productive and Unproductive Capital
Honestly, it's much easier to sit at a desk at home and gather long-term capital gains (which may or may not be productively invested) or tax-free earnings than put up with the guff of real business. And if this is the case, then who's going to risk everything to hire people and "get America working again"?

This is why I predict 30 million formal jobs will be lost in this Depression; it's no longer worth it in terms of risk/return to start businesses when everyone is sucking real businesses dry and leaving rentier capital lightly taxed and lightly regulated.

The above is the summary of an essay which points out that over time we've structured our economy and society such that non-productive capital (passive bond and financial investments) are treated with kid gloves by our rules sets and tax codes while using the same capital to run a real business exposes one to all sorts of headaches and additional taxes that do not apply to "rentier capital".

So why bother?

I can tell you from my experience, this rings true.  The amount of paperwork and forms and rules and taxes that my state of Massachusetts applies to my simple business are extraordinary compared to squaring up my investment and trading accounts at the end of the year.

Some of the rules are baffling and maddening as if designed to be cruel and arbitrary.

In this report for subscribers, I explore a remarkable article by Mr. James Grant that appeared in the December 20th edition of the Wall Street Journal. I found it remarkable because Grant correctly identifies the Fed as the source of current economic troubles and makes the case that, under a gold standard, we might have a different set of troubles, but we wouldn't be facing an extinction-level event for finance. With the deft use of historical examples, he makes a strong case that our current ills stem from very common mistakes that have plagued central banking ever since it was first invented. I expand on several of his arguments to steer towards the conclusion that inflation lies in wait.

Link to the new Martenson Report

As we cast our gaze back on the year, it is clear that, even as the world’s monetary and fiscal authorities applied gigantic solutions directly to the banking industry, their efforts went largely unnoticed by the real economy.

The theme for the period from 2000 to 2008 was “globalization.” It turns out that this may have been a fad.